Give wisely: Avoid charities fraud

Updated 8:14 pm, Monday, January 7, 2013

A panhandler looks for handouts near the University of Houston main campus.

A panhandler looks for handouts near the University of Houston main campus.

Photo: Sarah Tressler

Image 2 of 3

Dan Parsons is the president of the Houston Better Business Bureau. Parsons is photographed Thursday morning February 2, 2012 at the BBB offices. Nathan Lindstrom/Special to the Chronicle 2012 Nathan Lindstrom

Dan Parsons is the president of the Houston Better Business Bureau. Parsons is photographed Thursday morning February 2, 2012 at the BBB offices. Nathan Lindstrom/Special to the Chronicle 2012 Nathan Lindstrom

"Don't react just to react," Parsons says. "Research the charity and have a connection with the mission or what they're doing that's really important. Otherwise, you're not a vested giver."

This tip is especially important in the wake of catastrophe or natural disaster that might motivate people to give, since fraudulent charities often appear after such incidents.

"If you have a tsunami or an earthquake, one of the first things you'll hear is to make sure you're giving to well-known worldwide relief organizations or ones that have been established," Parson says. The holidays are another time when unscrupulous groups often form, he adds.

More Information

'Will Work for Food?'

Maybe not. Street-corner solicitors are a common sight at many major Houston intersections, but is giving them spare change a good idea?

"I've been working with this population since 1981," says Steve Luffburrow, CEO of Goodwill Industries of Houston for the past 26 years. "Over the years, part of my personal quest has been to give people on the corner my business card and offer them an opportunity to come to work at Goodwill."

The results have been dismal.

"Since 1981, after thousands of cards being handed out, I've only had one person show up," Luffburrow says.

"If they (the givers) are clear that in many cases, their money goes to support alcohol and other issues, then they have got to make their own decision," Luffburrow says.

"But be aware that those dollars probably aren't benefiting someone like you might think."

2. Name sounds familiar?

Check again. Fraudulent charities will create names that sound similar to well-established organizations such as the Make-A-Wish Foundation or the American Cancer Society, so be careful.

"In Houston alone, there are 20 organizations that have the word 'cancer' in their name, from M.D. Anderson Cancer Center all the way down to ones that are just totally fake," Parsons says. "You've got to make sure you're dealing with the real thing when you're making a donation."

3. Beware of the telephone.

Most legitimate organizations don't solicit donations on the phone; if they are, it likely means that they've enlisted a telemarketing agency.

"I hate to cast a big bad blanket over it, but the telephone is rarely your friend," Parsons says. "Very few reputable charities these days use telemarketing. They do public service, they may do email contact, but the phone generally means you have engaged an outside solicitor." The telemarketing company usually gets a piece of the pie, which means less money goes to the charity's mission.

4. Privacy, please.

In an age of rapidly advancing technology, any organization that takes credit-card information over the Internet needs to have an ironclad privacy protections in place, or charitable giving could turn into a risky venture.

"We do occasionally hear about identity theft because (the charities) have been busy doing their charity mission without setting up securities for their servers," Parsons says.

5. Beware of street seekers.

You know that high-school-age kid who wants to sell you M&Ms at the stoplight so he can go to college? Think twice.

"There's just no accountability," Parsons says, acknowledging that some reputable groups such as the Girl Scouts or the Salvation Army raise money in public places.

"Any cause that's valid today will be valid tomorrow," he says, so people should do their research before giving.